Service Tax not Payable on Clinical Trial on Drugs Supplied by Foreign Service Recipient: CESTAT

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled that service tax is not payable on clinical trials conducted on drugs supplied by a foreign service recipient. The tribunal held that such services are considered "export of services" and are thus exempt from service tax under Indian law. This decision provides clarity on the tax treatment of clinical trials, ensuring that Indian companies conducting research for foreign entities are not subject to undue tax burdens, thereby promoting the growth of the pharmaceutical and biotech industries.